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Corporate Governance

What is Corporate Governance

Corporate Governance is the set of rules, practices, process and policies by which a company or an organization is directed or controlled, with clear description of duties and responsibilities. Corporate governance is essentially involves balancing the interests of a company's many stakeholders, such as shareholders, directors, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for achieving a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

The Importance of Corporate Governance

A company with bad corporate governance or a company being directed and controlled only by dictation of an official, would suffer risks of postponement in business operation in the absence of the official who could dictate, for there is no rules or practices for other employees to look up to in carrying out their duties. In prevention of such risks, it is necessary for a company to steadfastly set the Corporate Governance forth and make its every official and employee well-understood of relevant rules, controls, policies and resolutions.

The Great Hor Kham (GHK) has well understood the importance of corporate governance since we established the company. The Board of Directors, with good corporate governance in hand, believes that balancing the interests and fairness of stakeholders, protecting the profit of shareholders, and taking both short-term and long-term effects in business operation into account with proper ethics and actions, will enable them to be more reliable for the company's shareholders, investors, and partners. The company therefore has always been making its best to have high level of the corporate governance.

On December 9, 2015, the Myanmar Securities and Exchange Commission has announced six public companies that has potential to be listed on Yangon Stock Exchange (YSX), and the Great Hor Kham was among the six. It therefore becomes crucial for the Company to complete its corporate governance system in time.

Filling the Gap

Early 2016, the Great Hor Kham has hired the service of BDO, a Malaysia based company, to perform Corporate Governance review. The BDO then pointed out some weak points and requirements in the Great Hor Kham's Corporate Governance system. Soon after the BDO's review, the GHK had cooperated with a local company to fill the gaps highlighted by the BDO. The undertakings, however, were not up to the Company's expected standard and the results were not satisfiable. The GHK then terminated the agreement halfway.

On March 28, 2017, the GHK has cooperated with Trust Venture Partner (Trust VP) in pursuance of the completeness of Corporate Governance. For the time being, it is safe to say that the gaps in the Company's Corporate Governance has bee filled to the fullest extent possible.

Current Corporate Governance of the GHK will be reviewed once a year by the Board of Directors for necessary modifications to make it relevant and applicable to the changing work environments.

Good Corporate Governance

Good Corporate Governance essentially enables a company in earning reliability, integrity, fairness, fulfilled responsibilities, of its shareholders. Choosing and cooperating qualified and impartial auditor enables the Company to not only achieve authentic financial reports, but also prevent corruptions. Worthily remunerate employees and officials will reduce the risk of high turnover of staff. Good Corporate Governance as such could increase confidence and reliability of stakeholders and shareholders.

Board of Directors

The board of directors represents shareholders of the company.

1. Organization

The Board of Directors of the Company for 2017-2019 two fiscal years comprises of nine directors. They met all criteria described in the Company's Memorandum of Association, and are elected among the submitted application for the position. The election is based on individual's skilfulness on relevant area, fulfilment of obligation, accountability, commitment to the role, ability to carry out business activities where deemed necessary, being endowed with work ethic, and giving priority to the Company's duties and responsibilities. By fully making use of good Corporate Governance, by following Memorandum of Association, and by complying with relevant laws and regulations, the Board of Directors will be able to carry out the Company's duties and responsibilities for the profit of all shareholders.

The Board of Directors is structured with independent directors, non-executive directors and executive directors. Executive directors are tasked with day-to-day management of the Company, working with the Board of Directors, and operating within a budget. Independent and non-executive directors typically do not engage in the day-to-day management of the Company, but are involved in policy making and planning exercises. In addition, independent and non-executive directors' responsibilities include the monitoring of the executive directors and acting in the interest of the company stakeholders.

Among nine member of the Board of Directors, six are independent and non-executive directors, the rest are executive directors. In summery, two out of three among the Board of Directors are independent and non-executive directors. In previous fiscal years, the Board of Directors comprised more executive directors than independent directors. According to the unanimous decision of directors made in the Board of Directors' regular meeting on September 17-18, 2017, the same director has been elected as the chairman of the Board of Directors, and Managing Director. To maintain balance role between the independent directors, non-executive directors and executive directors, therefore, independent and non-executive directors make up the majority of the full board.

2. Responsibilities

The Company's directors are currently elected and appointed by other board members which are also shareholders and founders. The board, on behalf and best interests of shareholders, is tasked with making important decisions, such as corporate officer appointments and firings, executive compensation, dividend policy, supervise the Company's performance, putting forward and implementation of business policies and frameworks, and other remuneration of staff.

Board of directors is responsible for helping a corporation set broad goals, support executives in their duties, while also ensuring the company has adequate resources at it’s disposal and that those resources are managed well. To summarize, the Board is to 1) be responsible and accountable, 2) supervise and provide supports to management team where deemed necessary, 3) lay down policies and business strategies for the Company.

In addition, Board of Directors shall have to comply with currently laws, bylaws and regulations of Myanmar.

3. Ethic

Directors shall have to devote adequate time and efforts to the given responsibilities, and actively participate in the Company's Annual General Meetings, regular meetings of the Board, and other relevant committee meetings. Directors shall mutually respect each other's opinion and cooperate with each other with well-discipline. Social or environmental concerns shall also be taken care of.

A director shall have to attend
(a) 75% of regular meetings of the Board, and
(b) 65% of special meetings.

4. Impartiality

Member of the Board shall have to be knowledgeable, visionary, fair, and impartial. Decision making should be based on independent thinking, details speculating, depth analysis, and thorough observation.

Member of the Board shall have to exercise duties and responsibilities with full display of loyalty to the Company as well as its shareholders.

Member of the Board shall have to refrain from and reject all illegal and unethical activities including bribery and other form of corruptions through out his or her undertakings.

5. Conflict of Interests

A conflict of interest is a situation in which an executive's personal interests implicitly or explicitly conflict with the Company's interests, and thus becomes unreliable in decision making due to his or her choice of personal gain over the duties to the Company in which he or she is a stakeholder.

Member of the Board, to the highest possible extent, shall have to refrain from any situation in which conflict of interest might take place. Any such circumstance shall be reported to the Audit Committee.

Committees
To be able to closely monitor and observe relevant operation, the Great Hor Kham has formed several committees. They are:

The Board has assigned the responsibilities for the relevant committee. Each committee then reports back to the Board regarding the performed responsibilities.